Procurement transparency dogs Romania

More than eight months after Romania's accession to the EU, public procurement is still a murky issue that needs to be addressed.

Romania's Senate Defense Committee last week started a hearing into the air force's public procurement of planes after months of media speculation over a controversial business deal between Romania and an Italian aerospace company. The issue highlights the corruption and dodgy practices that still plague Romania even after its EU accession.

In its latest progress report on the new EU members, the European Commission chided the country along with Bulgaria over their lackluster efforts to stamp out corruption.

One case that has been in the public eye is the procurement of seven transport planes for Romania's air force, in which Italian aerospace company Alenia pitched its C-27J Spartan plane against Spain's EADS CASA C-295 plane for the reported €300 million (US$409 million) that the Romanian government had ear-marked for the contract.

Alenia's initial win was scrapped by the National Authority Supervising Public Procurement Deals for not complying with the laws. Both the government and Alenia took the decision to the Court of Appeals, which overturned the ruling on a technicality in favor of Alenia. The court, however, made clear that "it rejected the request made by Alenia to make it mandatory for Romanian authorities to seal the contract with the Italian company."

Teodor Melescanu, the third defense minister in six months, must not have heard the announcement of the court's decision. In an interview with ISN Security Watch, his press office said the ministry "was still waiting for the court to issue its motivation for the ruling."

The Court issued it weeks ago.

What is true is that a large number of high-ranking officers connected with the bidding process have left their positions within the Defense Ministry, while the Ministry's internal investigation has arrived at only "preliminary results" not shared with the public.

Romanian media allege that officials tailor-made the call for offers to suit Alenia's Spartan and that the Italian company misrepresented the maintenance costs for the plane.

The criteria for winning the bid for the seven planes, which are listed on the Defense Ministry's website, were overall cost, safety in exploitation, long life-span for the major components and the best cost per-hour of flight.

Media reports highlighted that Alenia's plane was €42.2 million (US$57.5 million) cheaper than EADS' CASA only because Alenia hid many of the costs of operating the plane. Alenia said it would service the planes for 28 years, instead of the requested 30 years and dropped the fuel costs from the calculations. If these items would be factored back in, the cost per-hour for servicing and operating the planes would go well over the maximum €1,500 (US$2,045) per-hour set in the call for bids.

Alenia spokesperson Marco Valerio Bonelli said the media was misrepresenting the facts. "The plane presented by the competing company cannot perform according to some specific technical requirements which are vital for safe operation under the most difficult scenarios. The competing plane does not have a self-protection infrared system; it does not have an auxiliary power unit or the ability to carry containers of NATO standard size, which would insure the plane's compatibility with the C-130 planes the Romanian air forces already have in service," Bonelli told reporters.

The requirement that the transportation planes be able to carry loads up to 83 inches high (210 centimeters) exactly matched the Spartan's haul capacity. The official selling point was that the height for the haul was a NATO requirement. This was revealed to be not true.

The EADS plane also has an auxiliary power unit (APU) on one of the engines already mounted on the plane.

While the case of the seven transport planes remained in limbo, in July, the Supreme Council for Defending the Nation addressed the issue of buying two latest-generation planes to service the presidency, for an alleged €300 million (US$409 million).

Some pundits commented the figures were inflated intentionally to cover for the expenses of the transport planes that the air force wanted to buy.

Others said the new topic, addressing the timeliness of such an expenditure for the presidency, was aimed at taking the public attention off the botched public procurement bid and the controversy surrounding it.

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